In the /typo3conf/ext/demotemplate/Resources/Private/SCSS directory you will find all CSS files in SASS format. In the bootstrap subdirectory you will find the original bootstrap CSS framework. This is used in every compilation process. In the SCSS directory you will find the SASS files, which overwrite or extend the bootstrap framework to work better with TYPO3 or to improve the design.
To overload the standard bootstrap variables from the typo3conf/ext/demotemplate/Resources/Private/SCSS/bootstrap/_variables.scss original file, you just have to add them to the typo3conf/ext/demotemplate/Resources/Private/SCSS/_variables.scss.
As soon as you have made changes to the files and logged on to the backend and call the frontend, the SASS files are compiled automatically.